My new novel Walkaway (US tour/UK tour) is set in a world that is being torn apart by out-of-control wealth inequality, but not everyone thinks that inequality is what destabilizes the world — there's a kind of free-market belief that says the problem is really poverty, not inequality, and that the same forces that make the rich richer also lift poor people out of misery, delivering the sanitation, mass food production, communications tools and other innovations that rescues poor people from privation.
As I argue in Shared Destinies, a new article for Tor.com, even if you accept this, extreme wealth disparity still destabilizes our world, because it lets the super-rich turn their dumb biases, phobias and foolish superstitions into policy that the rest of us have to live with — from American climate denial to Russian homophobia to Saudi gender discrimination.
The super-rich—like every other human being—are just as capable of kidding themselves as any other human. This is our great frailty as a species, the reason for the scientific method (because every experimenter will happily interpret their ambiguous results as confirming their hypothesis, so they have to expose their experimental results to hostile feedback from people who point out their stupid mistakes or nothing will ever get done). One of the most toxic forms of ignorance is self-confident ignorance, and the successful are even more prone to this kind of ignorance than the rest of us, because their skill in one domain gives them the erroneous belief that they are good at everything.
(This is why con artists do so well on the rich and powerful: merely flattering their self confidence is enough to lead them into unfamiliar territory where than can be readily fleeced.)
Concentrating power in a few wise hands works great, but it fails badly. Letting the smart, competent technocrats make all the decisions without having to explain themselves to the sheeple can produce remarkable results, but it also means that when the Ubermenschen made dumb mistakes, those mistakes go unchecked, because the emperor's new clothes cannot be contradicted on pain of defenestration through the Overton Window.
So: the mental quirks of Galtian titans such as climate denial (USA), dotty cult religion (South Korea), cults of personality (North Korea), vicious misogyny (Saudi Arabia) and so on become the law of the land, and the consequences of these peccadilloes swamp any benefits we get from streamlining our authority structure to Get Stuff Done.
The more unequal a society is, the more out-of-balance its policies will be.